SANTA FE — Santa Fe’s Christus St. Vincent Regional Medical Center and its partner, Texas-based Christus Health, have agreed to pay $12.24 million to settle a whistleblower lawsuit over Medicaid payments and resolve allegations that the hospital violated the False Claims Act.
Christus Health and Christus St. Vincent were accused of making illegal payments from 2001-2009 to county governments that were used to fund the state’s “matching” share of Medicaid payments to the hospital.
The alleged “non-bona fide donations” thus resulted in false claims by the state of New Mexico to the federal government under the Medicaid program, according to the U.S. Attorney’s Office.
A statement released Friday by the office said “Congress expressly intended that states and counties use their own money when seeking federal matching funds.”
“Using local (public) funds provides an incentive for the counties and states to, among other things, hold down costs rather than rely on non bona-fide donations by private providers,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division, in a news release.
Essentially, the hospital and Christus Health were accused of giving their own money or in-kind services to Santa Fe County in return for receiving larger amounts when the hospital funding, along with county dollars, were matched 3-to-1 by the federal government.
“This restriction on the use of private hospital funds to satisfy state Medicaid obligations was enacted by Congress to curb possible abuses and ensure that states have sufficient incentive to curb rising Medicaid costs,” said the news release from the U.S. Attorney’s Office.
A statement from Christus St. Vincent says that the settlement involves “interpretation of complex federal regulations” that impacted New Mexico’s Medicaid Sole Community Provider funding.
“One of the issues in the lawsuit involved the impact of arrangements between the hospital and the County for the support of various community health initiatives,” the hospital said in a statement.
“Those arrangements were lawful, transparent and a matter of public record, and were well known by all stakeholders,” the hospital said.
A spokesman for the hospital said payments it made to Santa Fe County during the period in question went to support community health initiatives, such as diabetes and prenatal care programs at La Familia Medical Center, nursing scholarships at Santa Fe Community College, and the Santa Fe Rape Crisis Center. Santa Fe County had no comment Friday.
The hospital and Christus Health do not admit to illegal conduct under the terms of the settlement. Christus St. Vincent said it agreed to the settlement because “expending additional time and resourses defending the lawsuit “is not in the best interest of the Santa Fe community or the Hospital.”
The settlement results from 2011 lawsuit brought by Diana Stepan, a former Los Alamos County official who died last year. Her estate will receive $2.4 million of the settlement. The rest of the payout goes to the U.S. coffers.
New Mexico’s Sole Community Provider program, which was discontinued in 2014, provided supplemental Medicaid funds to hospitals in mostly rural communities. The federal government reimbursed New Mexico state government for about 75 percent of its health care expenditures under the program.
The U.S. Attorney’s Office wouldn’t comment on whether a county could face sanctions for its participation in the alleged illegal conduct or whether other hospitals in the state could also be targeted.